This is an excerpt from an NPR talk show with 2008 Nobel Laureate in Chemistry, Prof. Martin Chalfie. I found this part of the conversation most interesting:
SIEGEL: And the money - what did you do with the money, the prize?
Prof. CHALFIE: Well, the money is a funny thing. I think people hear about this massive amount of money that people get. It's a very nice sum, and I'm very grateful for it. But there's a number of things that happened to the money. And for my - in my particular case, the exchange rate tanked between the announcement and the distribution. And, of course, it was a prize that was shared with three people.
Prof. CHALFIE: But the lion's share of the prize money, since the Reagan presidency, when the tax codes were changed, has gone to the government. Because before Reagan, the rule was if you won an international prize, you kept the money. It was tax-free. Now, it's taxed. So 50 percent of it went immediately to the city, the state and the federal government. The rest of it is going to help put my daughter through college.
SIEGEL: Yes, there's an interesting premise there that if you win a Nobel Prize, you can pay your daughter's tuition in college today in America.
...if you win a Nobel Prize, you can pay your daughter's tuition in college today in America. "